"Subsequently, Matthews brought an action in the
Circuit Court of the State of Oregon (Lane County) and
alleged that the president's failure to make the final
tenure decision gave rise to claims for deprivation of
due process pursuant to 42 U.S.C. § 1983 and for breach
of contract under Oregon law. The defendants
successfully removed to federal district court, which
dismissed the case. The district court held that the
president's chief executive authority permits an
informal delegation to the provost of the power to make
final decisions regarding indefinite tenure. [The
Ninth Circuit] heard argument and determined that the
presence or absence of authority to make such a
delegation informally presents an important and
unresolved state law issue that is determinative of the
cause."

The question certified to this court by the Ninth
Circuit assumes that the president lacks explicit statutory
authorization to delegate informally the authority to make final
determinations regarding the denial of indefinite tenure.
However, in this court's view, the question actually implicates
two statutory grants of authority: ORS 351.070, which grants
rulemaking authority to the State Board of Higher Education
(board); and ORS 352.004, which authorizes the president to
control the University's practical affairs.

Matthews contends that the president's authority to
make final determinations regarding the denial of indefinite
tenure flows through the board under ORS 351.070. That statute
provides, in part:

"(3) The board may, for each institution under its
control:

"(a) Appoint and employ a president and the
requisite number of professors, teachers and employees,
and prescribe their compensation and tenure of office
or employment."

Matthews apparently accepts that the president informally has
delegated the authority to make final determinations regarding
the denial of indefinite tenure. See ___ Or at ___ n 1 (slip op
at 2 n 1). Matthews contends, however, that the delegation of
that authority violated the Administrative Procedures Act (APA),
ORS 183.310 to 183.550, because one of the board's administrative
rules requires the president to award indefinite tenure.
Matthews interprets that rule to mean that the president must
consider all tenure applications. Thus, Matthews argues, the
delegation by the president amended a prior rule, an action that
requires formal rulemaking under the APA. See ORS 183.310(8)
("rule" includes amendment of prior rule). Specifically,
Matthews relies on OAR 580-021-0105(5), which provides:

"Indefinite tenure shall be awarded to faculty of
demonstrated professional competence by the president
under terms and conditions set forth in the Board's
Administrative Rules and policies and in applicable
institutional rules."

"Subject to the supervision of the board, the president
of the University has authority to control and give
general directions to the practical affairs of the
school."

Matthews's position appears to be that any authority
that the president has to make tenure-related decisions under ORS
352.004 is superceded by administrative rules adopted pursuant to
the board's rulemaking authority under ORS 351.070(1). If,
however, the president's authority to deny tenure does flow from
ORS 352.004, then Matthews argues that formal rulemaking still
was required to delegate that authority and that has not
occurred.

In response to Matthews's principal argument,
defendants point out that OAR 580-021-0105(5) requires the
president only to award indefinite tenure under certain specified
circumstances, but does not require the president to deny
indefinite tenure. Because no rule requires the president to
deny indefinite tenure, defendants argue that such decisions
should be regarded as a "practical affair" of the school, falling
squarely within the president's authority under ORS 352.004.

We begin by examining the board's regulatory scheme in
more detail. The board has adopted rules for, inter alia,
awarding indefinite tenure, as well as for terminating faculty
with indefinite tenure and faculty without indefinite tenure.
See generally OAR ch 580, div 21 (establishing "Conditions of
Service" for University staff). For example, OAR 580-021-0120
provides:

"A full-time faculty member on annual tenure for a
sixth consecutive year shall be awarded indefinite
tenure commencing the seventh consecutive year or given
notice of termination effective at the end of the
seventh year."

(Emphasis added.) Thus, a faculty member in Matthews' position,
who has completed six consecutive years in an annual tenure
position and who is not awarded indefinite tenure, must receive
notice of termination effective at the end of the seventh year.
The applicable requirement for terminating a faculty member
holding annual tenure is "[a]ppropriate notice of termination * *
* as set forth in OAR 580-021-0305." OAR 580-021-0315. OAR 580-021-0305(1) provides, in part, that if:

"an annual tenure appointment * * * is not to be
renewed * * * timely notice of non-renewal shall be
given in writing as follows: * * * in the third and
subsequent years, at least 12 months' notice[.]"

The problem for Matthews is that OAR 580-021-0105(5)
does not require specifically the president to deny indefinite
tenure. Moreover, Matthews does not explain why this court must
interpret that rule as requiring the president to deny indefinite
tenure. Because no rule requires the president to deny
indefinite tenure, an informal delegation of the president's
authority to make such decisions does not amend a prior rule, and
the APA, therefore, does not apply. See ORS 183.310(8) ("rule"
includes amendment of prior rule).

In the absence of a board rule that directs the
president to deny indefinite tenure, we are persuaded that such
decisions are a practical affair of the University, governed by
ORS 352.004. In that event, Matthews argues that the delegation
of the president's authority to deny tenure is subject to the APA
as an agency "directive * * * of general applicability" under ORS
183.310(8). However, ORS 183.310(8) provides that "rule" does
not include:

"(a) * * * internal management directives,
regulations or statements which do not substantially
affect the interests of the public:

To summarize, ORS 351.070(3) grants the board
rulemaking authority, and ORS 352.004 authorizes the president to
control the University's practical affairs. A board rule
requires the president to award tenure, but no rule requires the
president to deny tenure. Reading the two statutes together, we
conclude that, in the absence of an explicit board rule to the
contrary, decisions to deny indefinite tenure are a practical
affair of the school, and that the authority to make such
decisions resides with the president under ORS 352.004. Formal
APA rulemaking is not required for the president to delegate that
authority because: (1) such a delegation amends no prior rule;
and (2) the public's interest is not substantially affected.
Beyond the requirements of the APA, we are aware of "no general
legal proscription against the retransmission of authority by
government agencies." Warren v. Marion County et al, 222 Or 307,
320, 353 P2d 257 (1960). Accordingly, we answer the certified
question in the affirmative. The president may delegate
informally the authority to make final determinations regarding
the denial of indefinite tenure to the provost.

Certified question answered.

1. By leaving the decision up to the provost, the
president affirmed a long-standing practice at the University.
In the words of the Ninth Circuit:

"[D]efendants do not explain how the delegation of
authority from the president to the provost came about,
and there is no administrative regulation that
specifically sanctions or explains that delegation.
The record, however, shows that the provost has had
this authority since before [the current president's
administration]."

Matthews v. Oregon State Board of Higher Education, 220 F3d 1165,
1167 (9th Cir 2000). For example, the record includes the
University of Oregon, Office of Academic Affairs, Faculty
Handbook, 81 (10th ed 1996), which provides, in part, that the
provost is "the only officer in the University * * * who may
award tenure." Defendants acknowledge that the Faculty Handbook
is an informal internal document and do not rely on it as
authority for the provost's actions. Id.